The president of Samsung has confessed that recalling 2.5 million of its Galaxy Note 7 smartphones will cost the company a "heartbreaking amount".

According to Bloomberg, the comment came on Friday when the head of Samsung's mobile business Koh Dong-Jin was asked by reporters about the financial impact of having to recall the phones, following the discovery of a defect in the batteries that caused some handsets to explode while charging.

applevsamsung
Some analysts forecast that the scale of the recall will cost Samsung anything between $1 billion and $5 billion in revenue. Given that Samsung's projected net income is $20.6 billion this year, the firm will undoubtedly absorb the loss. But Dong-Jin's comment could just as easily refer to the cost to the company's manufacturing reputation in its rush to beat Apple's iPhone 7 to market.

In Samsung's haste to beat Cupertino to launch, beginning last year the South Korean firm had brought forward the release of its Galaxy S and Galaxy Note series models by roughly a month. The move was initially deemed a success after it helped Samsung report on its best profit in more than two years, but the strains on its supply chain appear to have backfired disastrously.

"Samsung might have over-exerted itself trying to pre-empt Apple, since everybody knows the iPhones launch in September," said Chang Sea-Jin, business professor at Korea Advanced Institute of Science and Technology and author of Sony vs. Samsung, a history of the electronics giants.

Speaking to Reuters, Sea-Jin called the recall "an unfortunate event; it feels like Samsung rushed a bit, and it's possible that this led to suppliers also being hurried."

Samsung said in a statement to Reuters that it conducts "extensive preparation" for its products and will release them to the market "only after proper completion of the development process".

However, many view the recall as a gift for Apple, which is currently dealing with depressed phone sales and relatively lukewarm anticipation for this year's devices as analysts speculate the company is holding back its most impressive upgrades for 2017.

Indeed, since news emerged of Samsung's mass battery defect, Apple has alerted iPhone parts suppliers to increase production rates, suggesting the company is confident of a late surge in sales of its latest flagship smartphones.

"The time advantage that [Samsung] had on the iPhone, that's evaporated now," said Bryan Ma, an analyst at IDC in Singapore. "It'll hit them this quarter obviously, but if it's something they immediately address and immediately turn around, then there won't be a long-term impact."

With Apple said to be overhauling its mobile design for a tenth anniversary "iPhone 8", and Samsung clearly keen to bounce back and impress after its latest troubles, everything points to 2017 being potentially one of the most ultra-competitive years the smartphone industry has ever seen.

Top Rated Comments

keysofanxiety Avatar
85 months ago
Meanwhile, in Cupertino:

Score: 57 Votes (Like | Disagree)
keysofanxiety Avatar
85 months ago
They could just release the Note 5 all over again, it trumps the iPhone either way.
Not in a million years. Even the current iPhone 6S makes mincemeat of most other phones/phablets in regards to performance.
Score: 22 Votes (Like | Disagree)
JohnApples Avatar
85 months ago
"Give Samsung credit." Oh man. Of course they acknowledged and recalled them, there's a physically dangerous risk. It would be criminal not to. Nobody "gives credit" to car manufacturers or companies that make baby products when they recall their stuff. It's something they NEED to do.

I'd give Samsung credit if they avoided this altogether and made sure their batteries didn't explode in the first place. And no, I'm not saying Apple handles their product issues perfectly. Far from it. But Samsung does not deserve to be praised for having a recall. Good lord.
Score: 18 Votes (Like | Disagree)
keysofanxiety Avatar
85 months ago
First with what? The Note 7 already does stuff and/or has features even the iPhone 8 won't have. :rolleyes:
Yeah, like that whole exploding battery feature. Can your iPhone do that?
Score: 17 Votes (Like | Disagree)
keysofanxiety Avatar
85 months ago
Karma might be a bitch, but Apple could learn something from this.
Yeah, Apple certainly could learn something! Next time Apple rush production to undercut the new Samsung phone, without appropriate quality testing, leading to not identifying issues with phones exploding... :rolleyes:

Let me guess, you'll quote the 2011 dGPU failures or something, as pointing to Apple not doing a similar thing?

So many posters are out of touch with how the real world/businesses work. What Samsung have done in this situation is fully consistent with what all businesses would do. Samsung have not done anything out of the ordinary; well, other than releasing exploding phones.
Score: 16 Votes (Like | Disagree)
NT1440 Avatar
85 months ago
First with what? The Note 7 already does stuff and/or has features even the iPhone 8 won't have. :rolleyes:
And iPhones have features no non-iOS device will ever have, what's your point?

Let's whip out our spec sheets and compare shall we? :rolleyes:

Honestly, sometimes I see the tech fans as having the same "my truck has bigger tailpipes" mentality that I find so sad in people. Get the device that has the features you want/need.
Score: 14 Votes (Like | Disagree)

Popular Stories

iPhone 15 Pro Buttons CAD Leak

iPhone 15 Pro Leak Reveals Unified Volume Button and Mute Button

Monday March 20, 2023 8:33 am PDT by
As previously rumored, the next-generation iPhone 15 Pro and iPhone 15 Pro Max will feature a unified volume button and a mute button, according to leaked CAD images shared in a video on the Chinese version of TikTok and posted to Twitter by ShrimpApplePro. Instead of separate buttons for volume up and volume down, the iPhone 15 Pro models are expected to have a single elongated button for...
iOS 16

iOS 16.4 for iPhone Nearing Launch With These 5 New Features

Monday March 20, 2023 11:50 am PDT by
Apple says iOS 16.4 is coming in the spring, which began this week. In his Sunday newsletter, Bloomberg's Mark Gurman said the update should be released "in the next three weeks or so," meaning a public release is likely in late March or early April. iOS 16.4 remains in beta testing and introduces a handful of new features and changes for the iPhone. Below, we have recapped five new features ...
voice isolation

iOS 16.4 Adds Voice Isolation for Cellular Phone Calls

Tuesday March 21, 2023 11:01 am PDT by
The iOS 16.4 update that is set to be released to the public in the near future includes voice isolation for cellular calls, according to notes that Apple shared today. Apple says that Voice Isolation will prioritize your voice and block out the ambient noise around you, making for clearer phone calls where you can better hear the person you're chatting with and vice versa. Voice...
original iphone auction

Factory-Sealed Original iPhone Sells for $55,000 at Auction

Friday March 17, 2023 1:08 pm PDT by
A first-generation iPhone still sealed inside its box sold for $54,904 at auction, which is more than $54,000 over the original $599 price tag of the device when it was released in 2007. The original iPhone was put up for sale by RR Auction on behalf of a former Apple employee who purchased it back when it first came out. Back in February, an original, sealed iPhone sold for over $63,000,...
airpodsd 3 purple 4

iOS 16.4 Seemingly References New AirPods and AirPods Case

Tuesday March 21, 2023 11:43 am PDT by
The iOS 16.4 release candidate version that was provided to developers today appears to hint at a new set of AirPods that could be coming in the near future. According to @aaronp613, the beta features references to AirPods that have a model number of A3048 and an AirPods case with a model number of A2968. There have been no rumors that new AirPods are on the horizon, and it is early for...
iOS 16

Apple Seeds Release Candidate Versions of iOS 16.4 and iPadOS 16.4 to Developers [Update: Public RC Available]

Tuesday March 21, 2023 10:25 am PDT by
Apple today seeded the release candidate versions of upcoming iOS 16.4 and iPadOS 16.4 updates to developers for testing purposes, with the software coming a week after the launch of the fourth betas. The RCs mark the final version of the software that will be provided to the public in the near future. Registered developers are able to download the iOS 16.4 and iPadOS 16.4 updates...
google bard

Google Opens Up Access to Bard AI Chatbot

Tuesday March 21, 2023 4:23 pm PDT by
Google today began allowing users to sign up to use Bard, its AI-powered chatbot that rivals Microsoft's Bing chatbot. First announced back in February, Bard is an experimental conversational AI service for Google Search. Those interested in Bard can join Google's waitlist to get access, and some users have reported getting invitation emails just hours after signing up. There are a long list ...
smart monitor m8 samsung

Deals: Samsung's iMac-Like Smart Monitor M8 Drops to Lowest Price of Year So Far With $250 Discount

Monday March 20, 2023 8:27 am PDT by
Samsung today kicked off a special "Discover Samsung" event, which will be a week-long savings event focusing on Samsung monitors, smartphones, TVs, appliances, and more. While some deals will stick around the entire week (through March 26), others will refresh every day. Note: MacRumors is an affiliate partner with Samsung. When you click a link and make a purchase, we may receive a small...